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PAYROLL BLOG

Sep 8, 2016 / by

ITEMIZED PAY STATEMENTS AREN'T REQUIRED FOR EVERY EMPLOYEE---YET

The Obama
administration has issued final rules and guidance to implement Executive
Order 13673, Fair Pay and Safe
Workplaces, which includes a paycheck transparency provision for covered
federal contractors.

The provision,
which ensures that contractors' employees have the necessary information to
verify the accuracy of their paychecks, would require contracting agencies to
ensure that workers on covered federal contracts and subcontracts receive a
wage statement that contains information concerning hours worked, overtime
hours, rate of pay (or basis of pay, if not hourly), gross pay and itemized
additions made to or deductions made from pay. The executive order, signed in
2014 by the president, applies to new federal contracts of more than $500,000
starting in 2016.

The paycheck
provision, effective Jan. 1, 2017, would apply only to employees working on
federal contracts and subcontracts. A wage statement must be provided to every
worker subject to the Fair Labor Standards Act, all laborers and mechanics
subject to the Davis-Bacon Act and all service employees covered by the Service
Contract Act, whether the worker is classified as an employee or independent
contractor, the final rule says.

The FLSA has
no provisions requiring itemized pay statements.

Four states
and the District of Columbia require or will require employers to provide
information similar to that required by the paycheck provision.

Alaska requires employers to give all
employees an itemized statement showing such information as rate of pay, gross
and net wages and board and lodging costs.

California requires employers to give
all employees an itemized statement showing such information as gross wages, total
hours worked (unless the employee is salaried and exempt from overtime) and all
deductions. Effective Jan. 1, 2017, employees exempt from minimum wage and
overtime payments also are exempt from requirements regarding information on
total work hours.

Employers in the District of Columbia must
give all employees an itemized statement showing the payment date, gross
wages, all deductions and additions, net wages and hours worked.

Employees in New York State must receive
an itemized statement showing gross wages paid, all deductions, net wages and,
upon request, an explanation of how wages were computed. The statement must
also show such information as dates covered by the pay statement and pay rates
and basis, whether by the hour, shift, week, salary or other.

Employees in Oregon must receive an
itemized statement showing such information as total gross wages, amounts and
descriptions of deductions and rate of pay.

Effective Jan. 1, 2017, an itemized
statement must also include the payment date, employee name, employer's state
business registry number or business identification number, compensation
structure, any allowances claimed as part of minimum wage and the number of regular hours worked and
the number of overtime hours worked, as well as pay rates and total pay for
each, unless the employee is salaried and exempt from overtime.

If
every employee is to receive an itemized pay statement one day, the provision will
most likely gain traction at the state level before becoming a requirement at
the federal level.

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